Brexit’s impact on Caribbean travel

Brexit, and its potential impact on Caribbean tourism, is on the minds of many in the public and private sectors in the Caribbean. And a lot of anxiety focused in particular on the British travel market, a major source of tourist arrivals for many member countries of the Caribbean Tourism Organization (CTO).

Of the 28.7 million stopover arrivals in the Caribbean in 2015, visitors from the United Kingdom accounted for 1.1 million, up 10.4% over 2014.

“For the tourism-dependent Caribbean countries for which the U.K. is the major source market, their economic well-being is directly related to the health of the U.K. economy and the strength of sterling,” said Hugh Riley, CTO’s secretary general.

“What alarms will Brexit set off? Which ones should tourism planners pay attention to?” Riley asked.

He pointed to the decline in the value of the pound that will impact UK travelers’ spending power overseas, which could delay or alter their travel plans, a finding referenced by the Association of British Travel Agents.

It could have a similar effect on U.S. travel to the Caribbean. “If the British pound stays low against the dollar, Americans will seize the moment for the chance to visit Britain,” Riley said.

“As important as the U.K. is to the Caribbean as a source of tourist arrivals, the U.S. market is many times larger [14.3 million US visitors to the Caribbean in 2015], so there can be little doubt that a shift in Americans’ spending habits will have an effect on Caribbean tourism,” Riley said.

If demand for Caribbean travel softens among U.K. travelers and Americans shift away from the region, “the packagers and sellers of Caribbean vacation products will likely turn to the region’s decision-makers for a solution; a financial one, no doubt,” Riley said, adding that requests for increased marketing dollars and decreased accommodations rates to counteract the problem could start to appear.

Riley also suggested that airlines may have to adjust their prices and routes as they navigate their way around a possible combination of lower demand and higher ticket prices.

Anguilla, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos are U.K. Overseas Territories although they are not part of the EU. However, much of their funding comes from the U.K., and a challenge facing these five countries will be to secure funding from other sources if U.K. funds dry up.

“As vulnerable and unpredictable as the tourism industry can be, it has a strong record of resilience. Still, we must be realistic,” Riley said.

“Brexit presents a potential risk to Caribbean economies. The nature of the risk will depend on several factors, including the kind of withdrawal arrangements the U.K. negotiates with the EU and the impact on the British economy during the period of transition.”

The CTO and the Caribbean Hotel and Tourism Association are planning a detailed webinar briefing titled “Brexit and Caribbean Tourism: Possible Implications.” The date will be announced shortly.

In the meantime, Riley advised those planning to attend World Travel Market in London in November to keep an eye on the cost of attending the event. “With a little luck, that overall bill should be somewhat less than in previous years,” he said.